of a partial credit by the Collector on account of taxes for a subsequent year:
This contention is premised on the fact that the Collector credited an overpayment of $1,015.32 for the year 1930 against the liability existing for the 1917 tax. The contention is without merit.
Defendants' theory is that the payment of any sum on account of the 1917 tax liability would, under the terms of the bond, discharge the entire indebtedness. This claim is made on the basis that the condition of the bond is stated to be "that if the principal shall * * * duly pay any part of such tax found by the Commissioner to be due * * * then this obligation is void * * *." If the defendant is correct, then the payment of a single dollar on account of the obligation would discharge the entire liability for the tax. The language of the bond does not support such a conclusion. Obviously the bond contemplated the ultimate payment by the debtor and/or his surety of such part of the tax as might ultimately be found by the Commissioner to be due, rather than the discharge of the obligation by the payment of only a portion of the tax.
The separate defenses raised by the surety, Central Trust and Savings Company, were as follows:
(1) That there was no consideration for the execution by the surety of the bond;
(2) That the execution of the bond was ultra vires;
(3) That the bond was not accepted by the Government prior to an Act of the Pennsylvania Legislature alleged to forbid the execution of such bonds by banks.
No brief was submitted by counsel for the bank.
The instrument sued upon being under seal, the defense of no consideration is unavailing, since the seal imports a consideration.
No evidence was offered with respect to the defense of ultra vires.
The third defense of the surety, with respect to the claim of non-acceptance of the bond by the Government, is not supported by the evidence. Hence, judgment must be entered against both defendants.
Conclusions of Law.
On the facts found we conclude as a matter of law:
(1) Walter J. Rothensies, the present Collector for the First Collection District of Pennsylvania, and successor inter alia to Blakely D. McCaughn, is the proper party plaintiff in this action.
(2) The bond in this case was not obtained by or given under duress.
(3) The bond is not void for mutual mistake of law.
(4) The obligation of the bond has not been satisfied, except to the extent of the credit in the amount of $1,015.32, heretofore applied by the Collector of Internal Revenue.
(5) By reason of the neglect and failure of the defendants to pay the sum due upon demand by the Collector, the condition of the bond has been breached and has accrued to the plaintiff the right to demand and receive from the defendants the sum of $19,991.60, less the credit of $1,015.32, with interest at the rate of one-half of one per cent per month.
(6) The evidence sustains the judgment in favor of the plaintiff and against both defendants.
(7) Judgment should be entered for the plaintiff and against both defendants.
(8) The defendants' motions for judgment, summary and otherwise, are denied.
A decree may be submitted, in accordance with this opinion, plaintiff to be given his costs.
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